Chapter 2 – Earning an income
2.2 Alternate Ways to Earn Money
Outcomes
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c. Describe the advantages and disadvantages for a
variety of methods of earning income, such as hourly
wage, tips, piecework, salary, commission, contract
work, and self-employment.
Definitions
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Self- employed – a person who works for him or
herself rather than for an employer
Piecework – when someone is pad a set rate for an
amount produced
Commission – an amount paid usually a percentage,
paid to someone for a business transaction
Contract – a legal agreement that outlines terms,
conditions and payments for work to be done
Discussion
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Your flyer distribution business offers local stores a
contract for delivering promotional flyers to a
specified number of households. For stores each pay
you $0.08 per flyer to deliver flyers on a weekly basis,
and you hire two people to work for you.
1. What method of payment would you offer your
workers?
2. How would you determine whether a piecework
rate of an hourly rate will lower your costs?
3. Write an algebraic formula you could use to
calculate how much the for stores will pay you.
Example 1
Gwen works as a sales clerk in a clothing store. She earns a base salary
of $8.00/h plus a 15% commission on the price before taxes on each item
she sells. Her work day is 8 hours. One day, Gwen sells a suit with a price
of $625.00, a sweater priced at $95.00, 3 t-shirts that cost $45.00 each
and a raincoat priced at $225.00. How much does she earn that day?
Example 2
Hank is a painting contractor. He negotiates a contract with a
homeowner to paint the exterior siding on a house at a rate of $30.00/h
plus the cost of materials. It takes Hank six 8-hour days to prepare and
paint the siding, and he uses 15 gallons of paint that cost $45.00 each.
What is the total value of the contract?
Assignment